Forex trading is a popular investment option in Nigeria, where investors can trade various currencies and make a profit. However, one of the most important factors to consider when trading forex is the timing. The forex market operates 24 hours a day, five days a week, but not all hours are created equal. In this article, we will explore the best time to trade forex in Nigeria.
Firstly, it is important to understand the different forex trading sessions. There are four main trading sessions, which are the Sydney session, Tokyo session, London session, and New York session. These sessions overlap at certain times, creating the most active trading periods.
The Sydney session starts at 10 pm GMT and ends at 7 am GMT. This session is not very active, as it is the start of the forex trading week, and most traders are still asleep. Therefore, it is not the best time to trade forex in Nigeria.
The Tokyo session starts at 12 am GMT and ends at 9 am GMT. This session is more active than the Sydney session, but it is still not one of the most active trading periods. The Tokyo session is often referred to as the Asian session, and it is characterized by low volatility and low trading volume.
The London session starts at 8 am GMT and ends at 5 pm GMT. This session is the most active trading period in the forex market, as it overlaps with the Tokyo and New York sessions. The London session accounts for 30% of the total forex trading volume, and it is characterized by high volatility and high trading volume. The London session is the best time to trade forex in Nigeria, as it overlaps with the Nigerian working hours, which means that Nigerian traders can take advantage of the high trading volume and volatility.
The New York session starts at 1 pm GMT and ends at 10 pm GMT. This session also overlaps with the London session, creating a high trading volume and volatility. However, it is not the best time to trade forex in Nigeria, as it overlaps with the Nigerian sleeping hours.
Apart from the trading sessions, there are other factors to consider when deciding the best time to trade forex in Nigeria. These factors include economic news releases, market holidays, and daylight saving time changes.
Economic news releases can have a significant impact on the forex market, as they can cause sudden fluctuations in currency prices. Therefore, it is important to avoid trading during major news releases, such as the Non-Farm Payroll report, as the market can be very volatile.
Market holidays can also affect the forex market, as some markets may be closed, causing lower trading volumes and liquidity. Therefore, it is important to be aware of market holidays and avoid trading during these periods.
Daylight saving time changes can also affect the forex market, as they can cause changes in the trading hours. Therefore, it is important to be aware of the daylight saving time changes in different countries and adjust your trading strategy accordingly.
In conclusion, the best time to trade forex in Nigeria is during the London session, which is the most active trading period in the forex market. However, it is important to consider other factors, such as economic news releases, market holidays, and daylight saving time changes, when deciding the best time to trade forex. By being aware of these factors and adjusting your trading strategy accordingly, you can increase your chances of success in the forex market.
